(Alliance News) - Stocks in London are set for a muted start to Tuesday's abbreviated session as markets wind down for the Christmas break.
In a quiet morning for London, there were acquisition announcements from interdealer broker TP ICAP and heat treatment services provider Bodycote, while Pendragon sold off a Californian Jaguar Land Rover motor vehicle dealership.
IG says futures indicate the FTSE 100 index of large-caps to open 7.09 points lower at 7,616.50 on Tuesday. The FTSE 100 index closed up 41.11 points, or 0.5%, at 7,623.59 on Monday.
The London Stock Exchange will close early, at 1230 GMT, for Christmas Eve. The LSE will re-open for a normal, full-day session on Friday.
Markets in France also close early on Monday, while those in Italy and Germany are closed completely.
Wall Street will wrap up its Christmas Eve session early Tuesday, at 1pm local time, after a positive session on Monday. The Dow Jones Industrial Average ended up 0.3% at a new record close of 28,551.53. The S&P 500 closed up 0.1% and Nasdaq Composite up 0.2%.
In Asia on Tuesday, the Japanese Nikkei 225 index closed flat. In China, the Shanghai Composite ended up 0.7%, while the Hang Seng index in Hong Kong is down 0.2%.
"In true Christmas tradition financial markets saw low trading volumes and volatility yesterday," said David Madden at CMC Markets.
"Stocks in Asia and Europe had a good run recently thanks to the US and China agreeing to the first part of the trade deal earlier this month," he commented. "Yesterday, the European session was mixed as the FTSE 100 registered respectable gains, while mainland Europe underperformed. The Dow Jones posted a record close last night. The Chinese tariff story failed to spark any interest, possibly because many traders are already on holidays, and those whose are working, are content to sit on the fence."
Turning elsewhere, Madden noted the pound's fall this week.
"The pound took a knock yesterday as traders continued to lock in profits in the wake of the election rally. The fall in sterling needs to be put in the context of the huge rally it enjoyed between early-September and when the exit poll was announced on election night," he said.
Sterling was quoted at USD1.2944 early Tuesday, firm on USD1.2925 at the London equities close on Monday. The pound was quoted at USD1.3051 at the equities close on Friday, and rose above the USD1.35 mark just under a fortnight ago in the wake of the UK general election exit poll.
In other currencies, the euro was quoted at USD1.1084 early Tuesday, flat on USD1.1089 late Monday. Against the yen, the dollar was quoted at JPY109.39 versus JPY109.35.
In early UK company news, TP ICAP said it will buy Louis Capital Markets and MidCap Partners for an initial USD21 million.
Midcap Partners is a tied agent of Louis Capital Markets, and together they are a private brokerage group specialising in equities and fixed income, primarily based in Europe.
In addition to the initial consideration, TP ICAP said there is a deferred non-contingent consideration of USD6 million that will be paid over two years and a further USD17 million that may be payable depending on the performance of the business over three to five years.
Finally, there is potential additional consideration via a profit share, again dependent upon the performance of the business. These subsequent payments will be satisfied in cash, TP ICAP said.
The transaction is expected to complete in the first quarter of 2020 subject to regulatory approval in both the UK and the US.
"Louis Capital's strong brand and breadth of equity, equity derivatives and fixed income products complement our existing offering and strengthen TP ICAP's position in continental Europe," said TP ICAP Chief Executive Nicolas Breteau.
In other M&A news, Bodycote said it has agreed to acquire North America-based Ellison Surface Technologies.
Bodycote will be paying a gross consideration of USD200 million, worth around GBP154 million.
The deal will be "highly complementary" to Bodycote's existing Surface Technology business, the company said. It will be integrated into Bodycote's surface technology and aerospace business, "which itself has seen strong structural growth in recent years", the FTSE 250 constituent commented.
Pendragon said it has sold its Jaguar Land Rover motor vehicle dealership in Newport Beach, California for GBP31.1 million.
The transaction is in line with the company's strategy of disposing of its US motor business, the car seller said, and work on the remaining disposals continues.
John Laing Group said it has agreed to invest AUD51.5 million, or around GBP28 million, in the East Rockingham resource recovery facility in Perth, Australia.
When operational, the waste-to-energy centre will process around 300,000 tonnes of residual waste per year, the equivalent of taking 70,000 cars off the road, John Laing said. The centre is expected to be operational by 2023.
This will take the company's total investment commitment in 2019 to around GBP185 million.
In commodities, gold was quoted at USD1,489.56 early Tuesday, up from USD1,483.60 at the London equities close on Monday. Brent oil was trading at USD66.48 early Tuesday, higher than USD66.00 at the London equities close on Monday.
By Lucy Heming; lucyheming@alliancenews.com
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